How Children's Book Advances and Royalties Work

How do authors and illustrators get paid? Let's talk openly about that elusive topic everyone is curious about, but afraid to bring up: MONEY. When you think about authors, book advances, and royalties, it may conjure up visions of hiphop music videos from the ‘90s with money raining down on the penthouse suite. There’s an alluring mystique of the author sitting in a big leather chair, collecting checks, and being fabulous… but I’m here to tell you that that is not happening for most people. Not even close, especially in picture books.

This info is based on my personal experiences as an author-illustrator, or illustrator only, in traditional publishing of children’s picture books. Authors and illustrators who make middle grade, young adult (YA), or books for adults, or who self-publish, have their own experiences.

A note: One thing that is unique to picture books is you have one or two (or more!) creators — the author-illustrator, who is doing both things, or an author separate from an illustrator. If it is two separate people, they have two different contracts and any monies would be split.

Let’s get to it!

What is a book advance and how does it work?

A book advance is money paid against future earnings

A book advance is paid to the creator, by the publisher, against future earnings. The advance is kind of like the publisher placing a bet on the book. It’s a bet the book will sell to the consumer, and that you’ll do great work. It’s a risk for the publisher. With a debut author or illustrator, it’s an even bigger risk, but, there is also greater chance for reward, especially if you blow up and become the next Mo Willems.

Book advances are usually paid in portions

The advance for the author-illustrator, or illustrator, is paid in portions based on deliverables. This varies from publisher to publisher, and it's usually broken down to something like: payment 1 on signing, payment 2 on delivery of sketches, and payment 3 on approval of final art. If you have an agent, they will get a percentage of each of these payments for making the deal for you.

Book advance payments, because they are based on deliverables, can be stretched out over time. Publishing is a very slow industry–remember how long it took Pangea to separate into the continents? It’s that level of slow–and timelines and deadlines are loose, at best. You might have a period of YEARS that passes between all payments of the advance. There are a lot of reasons for this, all of which are valid. Some might include: if there are many revisions, or long periods of waiting on feedback from the publisher, or schedule changes, or maybe your art style takes a long time for you to complete.  

I’ll be rich after I get a book deal… right?

A 2-book, 6-figure picture book deal sounds pretty amazing! And it is! But the monetary reality of these book advances is that it isn’t that much money annually, especially when payments are spread out over 3 or 4 or even 5 years. For most people, it is not a realistic amount of money to live on without other sources of income or a spouse/partner who can help float you.

Don’t forget, your editor and art director aren’t the ones actually writing the check. There is a whole process on the publisher side through their finance department, which is necessary to get you the money, but can delay payments. Many or most publishers now use ACH payments rather than paper checks, which removes some of the friction.

As the book sells, the publisher “credits" your advance to pay themselves back. Only when they earn back all the money they paid you in the advance can you begin to see any royalties for that book. Which brings us to our next question...

What are royalties in publishing?

Royalties are a percentage of sales paid to the author and/or illustrator

Royalties on a picture book are usually anywhere from 5-10% of the retail price (depending on your role in the book... if you’re both author and illustrator, it is on the higher end). This means a picture book with retail of $17.99 = the creators would get .89 to 1.70 per hardcover book. Your agent will get a cut, too.

Royalties are not a sure thing

Here comes a big “but” … you only begin to collect royalty earnings in the form of money payable to you if the publisher sells enough copies to earn back what they paid you on the advance. That means all of those small amounts—the .89 to 1.70 per hardcover—get credited back to your advance until you have paid it all back. This is called “earning out”, and collecting royalties is dependent on it. This means that ROYALTIES ARE NOT GUARANTEED! I repeat: just because you published a book, it does not mean you are guaranteed to collect any royalties whatsoever.

Most picture books do not earn out their advance.  Picture books are very costly to make and they don’t sell bazillions of copies like some YA or adult titles do. They are also very costly for the average consumer to purchase. So you need to sell a LOTTTT of books before you have a chance at earning out. This could happen over a period of many years, but, the catch is, your book must sell just enough copies to stay in print for that long. So, you'll want to try to get the highest advance you’re able to negotiate on signing for a picture book, because, in many cases, it may be the only money you’ll earn on that book.

An asterisk here… as the publisher sells books, you don’t get that “credit” for the sale immediately. There is a waiting period of months (3-6 months-ish) to make sure there are no returns and it actually is a completed “sale”. Sales reports only come out roughly twice a year, so there is no “real time” way to truly know how your book is selling in all channels. Frustrating.

The exception here, of course, are the NYT bestsellers, celebrity or BookTok influencer books, major award winners like Caldecott, etc. The average consumer doesn’t realize those books are only a tiny fraction of ALL books published in a given year. But those titles are exceptions that are much more likely to earn out.